Tala tips clients on good money habits

Mobile-based online lending firm Tala has begun touring the country to educate customers on responsible borrowing practices.

The campaign comes at a time when the popularity of digital lending is growing even as the firms face increased Central Bank of Kenya (CBK) scrutiny.

The US-based fintech start-up says the tours, which have so far taken place in Nairobi, Nakuru, Mombasa and Kisumu, are also meant to increase consumer engagement and thank loyal customers.

“As we engage with our customers … we encourage them to borrow and invest in revenue-generating ventures,” Tala East Africa General Manager Ivan Mbowa said.

Since its entry in the market in 2014, Tala has disbursed loans to more than 2.5 million customers in Kenya. However, the fintech has in the past declined to disclose the value of the loans advanced locally.

It has however lent more than Sh72 billion in all its markets including Tanzania, the Philippines, India, and Mexico.

CBK Governor Patrick Njoroge recently raised the alarm on the digital lending segment, warning that the firms might be channels for laundering dirty money.

“These entities are not regulated by the financial regulator. It is a big problem for us. It’s not just a lacuna but a huge lacuna in law,” said the regulator’s boss in June. He had singled out Tala, Branch and Okash as credit-only mobile lenders that could be easily used to launder illicit cash.

The CBK introduced strict regulations under the Banking Charter, which spells out rules under which online lending firms must operate.

For instance, lenders such as Tala and Branch will first have to text borrowers the terms of the loan before approving it.

A recent survey by Consumer Insight Africa showed that mobile phone loans have overtaken friends and family to become the largest source of credit for most Kenyans.